Updated to clarify Berkshire is a new holding for the fund.
According to the fund's 2009 annual report to shareholders, Fairholme has devoted 4.2% of the fund's net assets to Citigroup shares, making it the fund's tenth largest holding. Sears (SHLD), Berkshire Hathaway and AmeriCredit (ACF), the subprime auto finance company, represent Fairholme's top three holdings and account for a little more than a quarter of its allocation.
Both Citigroup and Berkshire were new names for the fund. Berkshire stands as its second-largest holding now, at 10.1%, just behind Sears at 10.6%. Other interesting additions to the fund in the last six months of 2009 included Winthrop Realty Trust (FUR), and various bonds and a loan interest of CIT Group (CIT).Berkowitz is the co-founder and chief investment officer of Fairholme Capital Management. He also serves as portfolio manager of Fairholme, the firm's main investment vehicle. Berkowitz is known for wading in on stressed companies and "ignoring the crowd" on stock picks. For the calendar year 2009, the Fairholme fund rose by 39.01%, while the S&P 500 Index rose by 26.46%, according to the report. Berkowitz and Fairholme are one of the largest institutional investors in AmeriCredit. Fairholme substantially increased its stake in AmeriCredit in December 2008 through a debt-for-equity swap as the company was struggling for funding because of the frozen credit markets. Berkowitz has since been selling shares of AmeriCredit. Citigroup shares, which are currently trading roughly 5% above the $3.15 level where the company priced an equity raise in December, started 2010 strong. The stock reached a near-term high of $3.60 on Jan. 20, the day after Citigroup issued its fourth-quarter results. But following President Barack Obama's proposals last week for limiting financial institutions' size and scope of businesses, including curbing proprietary trading, the stock pulled back along with the rest of the financial sector.
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